Feds allege Pilot Flying J has engaged in “fraud” for 5-7 years

Posted by Mike Florio on April 18, 2013, 6:46 PM EDT

AP

It’s really hard to be a Browns fan.

Three days ago, the FBI and IRS raided the headquarters of Pilot Flying J, the company run by Browns owner Jimmy Haslam III and founded by his father in 1958. On Tuesday, Haslam downplayed the issue in a session with the media, calling it a minor issue involving a “very insignificant number” of customer rebates, involving no tax violations.

The federal government disagrees. Strongly.

According to the Cleveland Plain Dealer, documents filed in court on Thursday allege that Pilot Flying J engaged in fraud aimed at keeping money owed as rebates for “many years.”

And it gets worse. The federal government alleges that Jimmy Haslam knew about the practice, which “targeted unsophisticated trucking companies.”

A 120-page affidavit contends that the scheme was in place for five to seven years, and that one company lost nearly $150,000 because of it. The affidavit refers to a “confidential informant” who blew the whistle on the company’s practices — and on Haslam’s knowledge of the alleged scheme.

The investigation began in May 2011, well before Haslam launched his effort to purchase the Browns. Whether and to what extent the league was aware of the situation when approving the transaction isn’t currently known.

Haslam abruptly returned to Pilot Flying J as CEO in February, only months after former PepsiCo president John Compton took the job. It’s now fair to infer whether Compton stepped down once he caught wind of what was going on.

It’s also fair to wonder how this will play out. Eddie DeBartolo lost ownership of the 49ers after pleading guilty to failing to report an extortion attempt in Louisiana, which triggered a one-year suspension by the NFL. If Haslam ultimately pleads guilty to or is convicted of any crime, the Browns could once again be changing hands.

Wow, if you are already a billionaire, why bother to steal an extra couple of million? It doesn’t seem like it would be worth the hassle when you are inevitably caught. It isn’t like he could spend all of the money that Daddy left him anyway, he bought an NFL franchise and he still has lots left over.

Man. I’m a Ravens fan and even I can’t take pleasure in this story. Cleveland seems to be headed in the right direction and this happens. NFL step in and force this man to sell so this team can have something to cheer about. Enough is enough..

Remember it’s not a crime if you can pay your way out of it. Last time I checked, Mr. Haslam can afford any sort of fee put upon him.

If anything this is the federal government just trying to get their hand in his crooked cookie jar too.

And guess what, as soon as they do, everything is ok

numberoneinthehoodg says:Apr 18, 2013 7:04 PM

Nice vesting by the NFL. Not surprised really. Maybe they should make current and prospective owners take the Wonder Bread (lic) test????? Oh, wait, you won’t post those anyway. Fresh Wonder Bread from the bakery is the best!

another sports network is reporting that they are 95% sure Haslam will be indicted. drew brees is demanding an explanation, and jimmy was heard telling an associate “I will be out of ownership for 5 minutes”.

It’s not always easy being a Philadelphia sports fan, but it must be near impossible being a Cleveland sports fan. Maybe one of the leagues can give them an honorary title because it doesn’t look like any of the teams will win one anytime soon.

Why do people say the Browns have some of the best fans? They are as fair weather as it comes. It’s the city of Cleveland who fails. Failed to keep the ravens, failed to harbor a winning atmosphere. Why call them great fans ??? Cause their teams lose? That’s bs….. If that was the case then the clippers have the greatest fans in the history. If they were so great in Cleveland, then why does their teams stay aweful. Browns fans are not the best fans…. Fact is Cleveland doesn’t deserve a team. They should move them again.
London will at least force them to not be mediocre. They have 0 chance of being anything higher than last on their division for the foreseeable future. The rest of the division is so far ahead it’s comical

One man’s tax loophole is another man’s tax fraud. Haslam must have pissed off the wrong person.

ravenmomma says:Apr 18, 2013 7:16 PM

Part of me really feels bad for Browns fans as they have been longsuffering and can’t catch a break but another part of me says screw ‘em until they stop keeping Art Modell out of the Hall of Fame. It will be their curse until he is in.

timmyandtammyscumbag says:Apr 18, 2013 7:16 PM

LOL. PFT tries so hard to tie anything related to the Browns as misery or bad luck. Please. The Browns owner may be in hot water over a business that has nothing to do with the Browns and will have zero effect on what happens on the field this year. As a fan, this basically me

beerbudsnbevo says:Apr 18, 2013 7:17 PM

Just saw an article on the net saying Faith Hill will no longer do the Sunday Night Football Intro.

That really sucks.

She’s freakin unbelievable in those leather pants.

timmyandtammyscumbag says:Apr 18, 2013 7:18 PM

…means nothing. Keep trying to make mountains out of mole hills for hits, though.

The FBI is hardly ever wrong, especially when they go after a public figure. I am pretty sure they have triple checked before raiding the Pilot J offices.

So now Roger Godell who has been tough on players with regards to law-breaking, is going to have to make a decision about Haslam if found guilty! NFLPA will be looking at this closely.

Seriously I am starting to feel bad for Browns fans. No team deserves this type of emotional roller coaster ride.

jayniner says:Apr 18, 2013 7:22 PM

So this guy is under investigation by the feds and IRS for fraud………….you mean to tell us the guy that owns “Pilot Travel Centers”(aka truck stops), which are notorious for having hookers, drugs, stolen vehicles and merchandise, unsanitary bathroom facilities and every other illegal activity known to man………..is not a person with high moral or ethical standards and values, and not a person of integrity?

Browns are good fans my friend. They are consistently in the top 10-15 each yr in attendance and just like the steelers packers redskins and bears their backer fan club is incredible. Before Art M. moved the browns out of town that stadium was packed.

I go to a sports bar here in Florida that pulls in a few hundred browns fans each Sunday. All to watch them lose. It’s pretty incredible.

This is a damn disgrace. The Fans of the Browns are some of the league’s greatest and most loyal fans having endured misery very few cities can understand. The NFL leadership needs to grow up and do their jobs.

Why did Goodell and Mara not properly vet this guy? Perhaps if Goodell did his job and stopped acting like a clown and Mara stopped trying to unfairly penalize multiple division opponents this kind of garbage wouldn’t happen.

I mean, the amount of crap that has happened to all of the franchises in this city over the last few decades is astonishing! I mean, I am a Rams’ fan and have been for many years. They have really SUCKED over the last eight years. But, not like the amount of constant bad luck that continues to roll through Cleveland in so many forms.

As a former owner operator truck driver whom used flying j / pilot all of the time I’m sick by their actions. TA/Petro us better

goldrush36 says:Apr 18, 2013 7:58 PM

Man the one franchise that fans get crapped on more than Detroit. Start trending up then suddenly move to Baltimore. Start trending up again bam fraud and tax evasion. Fans deserve better. Both fan bases deserve better

Oh and those browns fans that think this will have no effect see one Eddie Debartolo who failed to report an extortion attempt while trying to acquire a gaming license in Louisiana. Gee that too had nothing to do with his franchise. Or hell we can drop down to coaches being punished by the league for their COLLEGE indiscrerions

seanx40 says:Apr 18, 2013 8:10 PM

How good is the NFL security that does the vetting of possible owners? Clearly not great.

The IRS is not the government. Wake up ppl. They are revenue collectors that too often abuse their power. Our tax system does create criminals out of otherwise decent people. Reminds me of our pointless war on drugs.

It’s the sickness of the American elite, which unfortunately our American political system has helped reinforce so they usually don’t get caught. Therefore, this clown must have been doing some really shady stuff.

Joe Banner might want to take back alot of that stuff he said about his previous employers because I’m thinking when this impending ownership change comes around, he won’t have many landing spots as the new guy does to him what he did to Heckert and company.

In his presser, Jimmy made it sound like a small accident here in Cleveland with his sound bites.
THE FEDS STORMED YOU BUILDING JIMMY !
Ripped files and computer files.
This is not a misunderstanding !
Having said that.
I LOVE YOU !
PLEASE GIVE US BACK SOME DIGNITY !
Our Browns have sucked for so long the garden hose dry rotted.

Why do people say the Browns have some of the best fans? They are as fair weather as it comes.

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Not sure exactly what your definition of fair weather is but the dictionary definition does not describe Browns fans at all considering….

– two winning seasons in 13 years

– one playoff win in 18 years

– An outdoor stadium literally on a great lake for a sport played in the fall (IE arctic/hurricane weather regularly).

yet.

– Was the second most popular team in the AFC North behind the Pittsburgh Steelers in ESPN’s Popularity poll.

– Literally Carried the ratings for the NFL draft in 2012 by themselves.

– Have the largest team backers association in the league.

and on top of that have managed to avoid local blackouts since 1995 despite having one of the larger stadiums in the NFL.

compare that to say the Indianapolis Colts who had one bad season in a decade and you could buy an entire section to one of their games by game 5 of that season to the point that the owner threatened to VOLUNTARILY blackout games due to fair weather fans and you can see how significant that is.

@Ravenmomma

Can’t blame Browns fans for keeping Modell out of the Hall of Fame as the media is in charge of that, not fans. Not to mention Cleveland media only has 1 vote just like everyone else. The guy will get in when their isn’t more deserving people which will be a VERY long time from now.

nobreak1269 says:Apr 18, 2013 10:43 PM

Send Rex over to sit in for Haslam as CEO of Pilot. Browns AND Jets get a win/win! Finally/finally

For the love of God, NFL. Quit railroading us with these good ‘ol boy network ownership clowns! You had at least 3 other ownership groups far more suitable than Al “Let me outbid everybody to rehab my local reputation” Lerner ready to step up in ’99 but you shafted us. Now you’ve handed the franchise to a Cleveland outsider who swung and missed at owning the Titans and is settling for the next best thing. Every time I hear the guy talk he reminds me of the son Butch Davis and Jerry Jones would have had. Now he’s tied up in this mess. Maybe you could spend more time vetting your potential owners than you do fining your rank-and-file players for legal hits days after no penalty was called.

If these allegations are true I’m one very disappointed Browns fan. This story is Enron-like complete with arrogant sales staff! Difficult to accept that this company built up by Jimmy Sr. from a small station would take advantage of other small firms. I don’t expect this to sit well with the lunch bucket crowd in Cleveland. Perhaps Jimmy Sr. will end up with the team. In the end still love my Browns but sheesh! What’s next?

louhudson23 says:Apr 19, 2013 8:08 AM

Another “job provider” shows he isn’t so smart after all…tell me again why we kow-tow to their every desire??? Is it the polluting land grabs? The tax dodging? The outsourcing? The bail outs?

steelerben says:Apr 19, 2013 10:41 AM

The poor Browns. I want to enjoy their misfortune, but at this point they’re like the dog that rolls over and just stares at you with sad eyes because it knows it is about to be kicked.

It wouldn’t be the feds seizing the Browns, by the way. It would be the NFL saying that Haslam couldn’t be an owner. Maybe they SHOULD do what the guy suggested in the other thread and sell the team to the city. Cleveland fought hard enough to keep the name out of Baltimore. Cleveland fans show up to games in driving snow and stay to the bitter end to watch their team lose by 20. They buy a new quartback’s jersey every two years, even though they know he isn’t going to be the answer either. They love this team that has never given them a reason to.

mogogo1 says:Apr 19, 2013 11:31 AM

He’s got enough dough to buy an NFL team, but risks everything on some scheme to defraud some trucking companies who were already paying him money, anyway? Cleveland ended up with a real winner with this guy…and smart, too.

raven515 says:
Apr 18, 2013 7:20 PM
If only the Browns had a good, honest owner like Art Modell was or Steve Bisciotti is. Sucks for Browns fan. Maybe one day they’llcompete for 3rd place with the bungles

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This just proves you are delusional. Art Modell was alot of things (most of those things are words that you would not hear out of Tim Tebow’s mouth), but he for damn sure was not an honest owner.

thewizardofbs says:Apr 19, 2013 4:21 PM

“The FEDS nor IRS do not make mistakes so if they say it is fraud then it is fraud.
Looks like Cleveland might need to get another owner soon.”
__________________________________

sometimes the IRS actually does makes mistakes, or at least can’t get a conviction. Look at the indy car driver Helio Castroneves case. The IRS wanted to send him to prison for 5 years but he proved in court they were wrong and that he did no wrong.

No way, an american business defrauding its customers. Who’d of think that going in business in the U.S.A would force you to be a lying crook. Pffft whatever. That’s how we got built. Bravo, Bravo

txnative61 says:Apr 21, 2013 1:40 AM

John D might say “what you call fraud, I call enterprise.” As a former driver for a large trucking company, the big dogs, buying large volumes of fuel control the profits of big truck stop chains, and can negotiate below market discounts to make them company fuel stops. Independents and smaller volume customers pay more, but Pilot/Flying J’s prices are typically at the low end with adequate, reasonably clean and safe driver services. Many go elsewhere, but several hundred extra cost per stop to fuel keeps the industry very competitive. In fact, it looks like a power play by competitors which should not involve the legal system. If the end result drives up the cost of fuel, nobody really wins.